The Fed's commitment to normalise interest rates may be riskier than believed

The U.S. Federal Reserve has been committing itself to raising rates back to normal levels, after keeping them unnaturally low for nearly a decade in order to counter the aftereffects of the Financial Crisis of 2007-08. An improving economy gives them the reason to do so.

However, Satyajit Das (named one the world's 50 most influential bankers in 2014) argues that the Fed may be underestimating the risk in increasing interest rates. His contention is that global private debt has built up enormously during this period, and a significant part of it is substantially risky. Higher interest rates could therefore trigger off defaults, with a cascading effect across other markets.